Sunset Hills’ general-fund balance projects decline in ’09

Finance committee believes budget ‘essentially’ balanced

By BURKE WASSON

Sunset Hills officials are proposing a 2009 budget that shows a decline of $42,961 in the city’s general-fund balance by the end of next year.

For 2009, city officials are forecasting $8,329,046 in general-fund revenue, up from the 2008 projection of $7,933,766.

The proposed 2009 budget also shows general-fund expenses of $8,372,007, up from the city’s 2008 projection of $6,316,036. More than $1.27 million of that increase in expenses comes from a budgeted expense in 2009 of federal grants. In total, the general fund’s balance is projected to drop from $5,736,409 on Jan. 1 to $5,693,448 by Dec. 31, 2009.

Ward 2 Alderman Tom Hrastich, who also serves on the city’s finance committee, told aldermen last week that because of economic conditions across the nation, the committee believes that the $42,961 drop in reserves is not too detrimental and that 2009 still is “essentially a balanced budget.”

“We used a factor of a 1-percent increase in estimated sales tax and related revenue increases for both 2009 and 2010 based on recommendations from our auditors,” he said. “However, other revenue streams may be reduced. As a result, this 2009 budget submission shows a decline in the general-fund balance by about $43,000. The finance committee considered this essentially a balanced budget.”

Besides the general fund, Sunset Hills’ capital-improvements fund balance is slated to improve in 2009 from $887,116 to $912,760 and the city’s stormwater/local parks fund balance is projected to improve in 2009 from $1,232,200 to $2,476,722.

The city expects its county road fund balance to drop from $242,931 to $931.

Hrastich noted that funds from the successful 2007 half-cent sales tax Proposition P are not included in the 2009 budget as those funds are designated for the city’s plans to construct a new community center and aquatic center.

“Note that there is no budget for expending Proposition P revenues,” he said. “Beginning in 2009 and for the next 19 years, this revenue is being set aside to retire certificates of participation for the community center, pool and stormwater projects, assuming COPs are eventually issued.”

Hrastich added that because of the uncertain economy, aldermen may struggle in 2009 with acquiring COPs to provide funding for these projects.

“With respect to Proposition P and the issuance of COPs, the estimated amount of revenue to be generated has fallen from $13.8 million to $11.7 million in the last few months,” he said. “With the nation’s financial situation, no one has a realistic forecast on what they may bring next spring when we start considering issuing them.

“The board will have a difficult decision on whether or not to cut back on certain expenditures, issue the COPs piecemeal or implement requirements or postpone them all until financial conditions improve.”

Sunset Hills aldermen in October authorized the completion of a second design phase to construct a new community center and pool.

Architects favor building the new community center on the municipal campus at 3939 S. Lindbergh Blvd., near the intersection of Lindbergh and Eddie & Park Road, rather than a site near Truman Elementary School for aesthetic reasons.

As for the pool, Mayor Mike Svoboda has said the plan is to close the Watson Trail Park Pool at the end of the 2009 season and open the new aquatic center in 2010.

Preliminary plans show the aquatic center superimposed on the area where the existing municipal pool is at Watson Trail Park, 12512 W. Watson Road, and a leisure pool constructed.

The community center’s newest design calls for a two-story, 23,065-square-foot facility with a 5,715-square-foot gymnasium and 4,095-square-foot fitness area and 2,771 square feet for multipurpose use.

As for the aquatic center, the leisure pool could include a lazy river and slides, among other features. In addition, preliminary plans call for an eight-lane, 25-yard competition pool with diving to be built near the leisure pool.

While the majority of the funding is coming from Proposition P, the budgets of both projects are exceeding original expectations.

Prop P was approved by voters in April 2007 and contributed a half-cent increase in sales tax. Prop P, which has a 20-year life span, is expected to generate $13.8 million to improve parks and solve stormwater problems within the city.

To compound the problem, the Public Works Department is in need of additional financial help for such stormwater priorities as culvert replacement under Rott Road, bridge repair at West Watson and Baalbek roads and stream-bank stabilization at eight locations identified by the Public Works Department.

Hrastich acknowledged that city department heads have budgeted “significant” projects and expenses in 2009 and asked aldermen to review those submittals and contact the finance committee between now and the board’s next meeting on Dec. 9, when the budget will be approved.

“The remaining departmental budgets have a list of projects, equipment purchases and other significant expenses as submitted by department heads,” he said. “It is not the function of the finance committee to accept or reject any of these projects. Rather, this is the board’s option to include or exclude items. Therefore, your charge between now and the second reading in December is to review these lists. If there are items you question or you find are missing, you may question the appropriate department head.

“You need to let the finance committee know what your results are so it can be put into or extracted from the budget.”

Hrastich commended department heads for their “proactive” approach to submitting 2009 budgets.

“This year, the department heads were proactive, met together and submitted a balanced budget,” he said. “The finance committee wishes to commend each of them for taking this action and making this year’s budget deliberations the easiest in our collective memory …”